When the Business Software Alliance announced a settlement with Jamestown's Furnitureland South Inc. over its use of unlicensed software, the group wanted to send a message to Triad-area companies: Keep tabs on your software or else.

Furnitureland South agreed in June to pay $125,000 to settle claims that it had unauthorized copies of software on its computers. The company agreed to delete any undocumented copies and strengthen its software management policies and procedures.

The new policy, spelled out to employees in a memo, says any employee found copying software other than for backup purposes is subject to termination. Any employee who gives software to any other person is also subject to termination. It notes that the policy might seem harsh, but the consequences to the company are severe.

BSA, based in Washington, D.C., is a lobbying group for software developers that fights piracy worldwide. Members include Microsoft, Adobe, Novell and Lotus.

BSA contacted the company following a call to its anti-piracy hotline. In response, Furnitureland South conducted a self-audit of all computers on site, found some unauthorized copies of Microsoft and Lotus and moved to take care of the problem.

"The fact that we discovered any unlicensed software on our premises at all demonstrates how easily software can insinuate itself into an office in the absence of extensive, all-encompassing software management practices and controls,'' said Darrel Harris, Furnitureland South's president.

That's a common reason cited by companies nailed by BSA, said Bob Kruger, vice president of enforcement. "It doesn't go to the core competency of a company, it goes to a blind spot in the company's software management practices,'' said Kruger, who noted he was particularly pleased with Furnitureland South's prompt attention to the problem.

In recent months, the BSA has announced a $150,000 settlement with Dialog Corp., a company with operations in Cary, N.C., and a $403,500 settlement with Budget Rent-A-Car.

But promptly correcting a problem doesn't do enough for BSA's members -- mostly because of the piracy that never reaches their attention. The association claims four of every 10 software programs installed worldwide are not licensed, leading to more than $11 billion in lost sales, 130,000 lost jobs and more than $5 billion in lost wages.

To combat software piracy, the BSA has a hotline, (888) NOPIRACY, and investigates hundreds of calls a year. It estimates that the 2,000 tips received yearly result in 500 actions -- either settlements or court cases.

In 1997, the BSA collected $6 million in fines and legal fees. The settlements typically call for the company to pay the full list price of all the software that has been illegally copied and requires them to replace the copied software with purchased versions.

Under federal law, Kruger's agency can file civil cases, obtain search warrants and receive the help of federal marshals in searching a company's computers. In court, federal law allows a $100,000 fine per copyright violation. Usually, though, a letter from BSA's lawyers does the job.

"The letters typically says, `We've found evidence that your company has more software than licenses. How would you like to work with us?' For the most part, we get a lot of cooperation,'' Kruger said.

Sloppy software management, ignorant employees, greed and a sense that copying software is a "victimless crime'' all contribute to the problem.

Although it is commonly cited, the sloppiness excuse aggravates Kruger.

"These companies are typically very good at complying with other legal requirements,'' he said.

Worse is when a company is alerted to the rampant software piracy and chooses to look the other way. That scenario is one of the key reasons employees will call the piracy hotline. "A typical situation is a manager of information systems is hired to network the software, the person does an audit and finds 100 more copies of software than licenses. It is brought to the attention of the president, who asks how much it is going to cost to get legal. At that point, the president says, `We brought you in to save money, now this is going to cost us money,' ''

In other situations MIS professionals will cut corners and copy software to stay within budget. Occasionally, higher-level managers actively condone copying to save money. "They've decided to take the business risk,'' Kruger said.

BSA investigates by determining how well the employee calling the hotline knows the company's computers and software. Then BSA calls the software manufacturer to see how many seat licenses the company holds. If the caller suggests 60 people are using Microsoft Word and the company has, say, five licensed copies, Kruger proceeds with the investigation.

"Many of our tips come from disgruntled employees,'' Kruger said. "We have to separate those disgruntled employees with good information from the disgruntled employees with bad information.''

Another group that BSA receives complaints about is computer retailers and resellers. Individual consumers, angered when they realize they don't have a license for the software installed on their computer, will tip off the BSA.

"Occasionally we can interest federal law enforcement in those cases,'' Kruger said.

Although the BSA typically investigates larger companies, its enforcement efforts aren't limited to large firms, nor is software piracy just a problem for bigger companies.

Because of its solution provider partnerships with Microsoft and Novell, Carolina Networks can't have an ongoing service relationship with a firm using pirated software. To avoid the problem, the company's service agreement requires customers to stay legal.

To get them in compliance, Carolina Networks first does an audit. Once the number of seat licenses matches the number of software copies, Hamberger's staff helps a company stay legal by configuring computers so that users can't install software on a computer. Another way to help companies stay legal is to disable or eliminate the CD-ROM capabilities of a PC. CD-ROMs are frequently copied and "most people don't need them at their workstation unless they like to listen to music,'' Hamberger said.

"We tell them they can get in trouble because we're required to report to the software police, but we also tell them we can get in as much trouble if we're their service provider and they're caught using illegal software,'' Hamberger said.